Why Microsoft Fears Google Sort of Revealed
July 7, 2008
My trusty news reader delivered this knowledge dumpling to me on July 5, 2008. I scanned it between pitches at the Louisville Bats baseball game. Like most commercial business writing, the essay is good, well-reasoned, and shaped to put major events into an understandable context. You can read “Why Microsoft Will Win Yahoo” here. by David Kirkpatrick, senior editor of Fortune, writing on CNN.com. This business essay has an A at Wharton written all over it: primary research in the form of quotes from a personal discussion with Microsoft’s Steve Ballmer, humor in the form of a left-handed description of Google as owner of the “world’s most powerful and profitable marketplace” with Google technology described as not “the best”, and an analysis pegged to Microsoft’s need to get its transmission in gear in terms of online advertising.
With Mr. Kirkpatrick, I agree on most points, but one passage nibbled at me during the thrill-lacking Louisville Bats’s game:
Google (GOOG, Fortune 500) drives Microsoft crazy for two fundamental reasons. One, Google has developed the fastest-growing new pool of profit in technology with its ad-supported search business. And secondly, it has taken the mantle of “greatest and most powerful tech company” away from Microsoft, with all the associated benefits that go along with that, most notably a very high stock-market valuation.
Here’s why.
Recall that Google is a decade old. It is no start up, but some journalists fall for the crazy college guys charade with astounding consistency.
Today, the company is without a doubt the leader in search. With some inspired me-too borrowing, Google jumped into online advertising and now, after facing minimal competition is these areas controls somewhere between 65 percent and 75 percent of the market for search in North America and Europe. Russia is lagging because of Yandex.
And Google’s search and ad platform was accidentally discovered by Google as able to support a range of applications, services, and functions. Some of these are definitely not-searchy. For about nine years, Google’s engineers have built more than 80 services, created a Google Search Appliance, moved into mapping, probed online database technology, and offered products and services to the education market, commercial enterprises, and government agencies. The telecommunications industry discovered how annoying Google could be with its New Age approach to mobile communications. The video industry is relying on Viacom to put Google in a straight jacket. All told, Google is exploring six or seven industry sectors with products and services. Some of these are only variations of search technology; other thrusts such as online payments just run on the Google super computer.
Microsoft is now trying to “close the gap”, “catch up”, or more colloquially “kill Google” by taking these actions:
- Creating Live.com, expanding cloud or network solutions, and making Google a focal point much as Inquisition worker bees focused on folks who did not follow the desired line of thought
- Announcing investments in data centers and research labs. Both of these initiatives look quite a bit like Google’s approach to data centers and research labs, but Google got its ideas from AltaVista.com engineers and Bell Labs. The problem is that it takes time to get data centers up and running, particularly when you are using systems that require name brand hardware and technical baby sitting.
- Buying search technology.
The leader in collecting search technology is Yahoo. So, Microsoft will buy that company and get licenses and technicians familiar with these search systems: {a} AllTheWeb.com which was originally based on Fast Search & Transfer technology now owned by Microsoft; [b] AltaVista.com, the company whose engineers provided Google with a turbo boost in the the 1999 to 2002 period with some residual kick continuing even now; [c] Inktomi, one of the original Web indexing systems; [d] the Flickr search system; [e] Stata Labs, the email search system in use in Yahoo mail; [f] InQuira, the natural language search system used for Yahoo Help; [g] the various research search engines that range from the moth balled Mindset to the newer and somewhat flaky semantic Microsearch; [h] the moth balled Delicious.com search system; and a handful of others lost in the jumble room of my 64 year old memory.
Add to this collection, the SQL Server search technology, two types of SharePoint search, the search functions in Dynamics CRM, Fast Search & Transfer’s Web search and ESP (enterprise search platform), a couple of flavors of desktop search, the mind boggling awful search in Outlook and Outlook Express, and the search function in the Xbox which at one time was provided by Mondosoft (now part of SurfRay in Denmark). The Powerset search system built on Xerox PARC technology and partially running on Amazon’s Web services platform. Of course, I’m probably forgetting a few.
What I am driving at is that if and when Microsoft buys Yahoo’s search business, the Yahoo.com site really should be part of the bargain. Despite its many flaws and weird America Online approach to information, Yahoo.com gets traffic. And traffic is what Microsoft needs, not more wacky search technology.
Consider this statement by Mr. Kirkpatrick:
So even though Microsoft has with painstaking and expensive effort come near to par with Google on search technology, it still shows little likelihood of competing successfully with it as a search business.
“Par with Google on search technology” is not going to deal with the fact that Microsoft finds itself on the defensive not just in search but in these key areas:
- Brand (generally positive)
- Demographic hooks (moving into education where Apple and Microsoft have long ruled the hen house)
- Business models (Advertisers pay, “pull” sales, not “push” sales the way Microsoft earns money, piece of the action, etc.)
- Velocity of innovation (slowing but still pretty zippy)
- Cheaper operating and infrastructure costs (not understood and overlooked as a competitive advantage by Wall Street analysts)
- Time (Google has a head start and is still moving forward).
When I read business articles, I recognize the care that goes into them. I know from my days at Ziff Communications how much it costs to craft prose that flows.
My concern is that after a decade of Google being Google, no one recognizes that Google represents a fundamental change in the software, services, and systems business. Microsoft is now reacting but I think it is too late to buy aging portals, collect odd ball technologies, and try to use money to buy parity with Google.
The Fortune article does not and can not tackle such issues in a short essay. I am looking forward to Fortune and other publications coverage of Google. I do hope to read something more substantive than Microsoft will keep trying to catch Google (pretty much an impossibility in my little Kentucky sphere of understanding), Google making people stupid (a concept I don’t understand because Google manifests a demographic. Google did not create the demographic’s behaviors), and Google is on the ropes in the telco business.
Google drifts above these particulars. The company does face a grave threat but from attorneys, not software companies or venture capitalists’ bets on “Google killers”.
Information on this perspective on Google is available, just hard to find.
Stephen Arnold, July 6, 2008
Enterprise Search Top Vendors: But Who Is the Judge?
July 3, 2008
My jaw dropped when I saw “The Top Enterprise Search Vendors,” an essay by Jon Brodkin, a writer affiliated with Network World. You can read the two-part document here. (Note: The url is one of those wacky jobs with percent signs and random characters, the product of a misbegotten content management system. So, if you can’t get the link to work after I write this [July 3, 2008, 2 pm Eastern time], you are on your own.)
Let’s cut to the chase.
Mr. Brodkin is using a consulting firm’s report as the backbone of his analysis. There is nothing wrong with that approach, and I use it myself for some documents. He picks up assertions in the consultant report and identifies some companies as “best” or “top” in the “enterprise search” market. We need a definition of “enterprise search”. A definition, in my view, is an essential first step. Why? I wrote a 300-page study about moving beyond search for Gilbane Group. A large part of my argument was that no one knows what enterprise search so dissatisfaction runs high, in the 50 to 75 percent. Picking the “best” or “top” vendor when the majority of system users are unhappy is an issue with me.
He writes:
The best enterprise search products on the market come from Autonomy, Endeca, the Microsoft subsidiary Fast and Vivisimo, but Google’s Search Appliance continues to dominate the market in terms of brand awareness and sheer number of customers, Forrester Research says in a new report.
Ah, yes, the Forrester “wave” report. Now we know the origin of the adjectives “top” and “best”. Other vendors to note include:
- Coveo
- IBM
- Microsoft’s own MOSS and MSS search systems (distinct from the Fast Search & Transfer ESP system). This is in too much flux to warrant discussion by me. I handle this in Beyond Search by saying, “Wait and see.” I know this is not what 65 million SharePoint users want to hear, but “wait and see”.
- Oracle
- Recommind.
Let’s do a reality check here, not for Mr. Brodkin’s sake or that of the Forrester “wave” team. Just in case an individual wants to license a search system, some basic information may be useful.
First, there are more than 300 vendors offering search, content processing, and text analytics systems at this time. There is no leader for several reasons:
- Autonomy has diversified aggressively and much of their market impact comes from systems in which search is a comparatively modest part in a far larger system; for example, fraud detection. So, revenues alone or total customer count are not key indicators of search.
- Fast Search & Transfer has been struggling with a modest challenge; namely, the investigation of its finances over an alleged loss of FY2007 $122 million in the fiscal year prior to Microsoft’s buying the company for $1.2 billion. Somehow “best” and “top” are in conflict with this alleged short fall. So, “best” and “top” mean one thing to me and definitely another to the Mr. Brodkin and the Forrester “wave” team. If an outfit is the best, I assume the firm’s financial health is part of its being “top” or “best”. I guess I am old fashioned or an addled goose.
- Endeca works hard to explain that it is an information access company. Sure, search functions work in an Endeca implementation, but I think lumping this company with Autonomy (diversified information services) and Fast Search & Transfer (murky financial picture) clarifies little and confuses more.
- Vivisimo is a relative newcomer to enterprise search. The company has some nifty de-duplication technology and it can federate results from different engines. The company is making sales in the enterprise arena. I categorize it as an up-and-coming vendor. I wonder if Vivisimo was surprised by its being labeled as a firm nosing around in Autonomy and Endeca territory. Great publicity. But Autonomy is about $300 million in revenue. Endeca is in the $110 million in revenue range. Vivisimo is far smaller, maybe one tenth Endeca’s size, but growing. A set to my way of thinking should contain like objects. $300 million, $100 million, $10 million–not the type of set I would craft to explain “enterprise search”.
Second, have vendors been miscategorized. I am okay with mentioning Coveo and Recommind. Both companies seem to have a solid value proposition and a clear sense of who their prospects are. Coveo, in particular, has some extremely tasty technology for mobile search. Recommind, despite its efforts to break out of the legal market, continues to make sales to lawyer-types. I am not sure the word “search” covers what these two firms are offering their customers. I think of both vendors offering “search plus other services and functions.”
Third, identifying IBM and Oracle as key players in search baffles me. Both buy consulting and advertising, but in “enterprise search”, neither figures prominently in my analyses. IBM is not a search company; it is a consulting firm using advice to push hardware, software, and services. Search at IBM can mean Lucene with an IBM T shirt. IBM also sells DB2, FileNet, iPhrase, and assorted text processing tools whose names I cannot keep straight. IBM also has an industry “openness” initiative called UIMA, a gasping swan right now in my opinion.
And, Oracle has been beating the secure search drum to deaf ears for a couple of years. Oracle SES 10g sells more Oracle servers, but Oracle is moving a lot of Google Search Appliances. So, what’s Oracle search? Is it the PL/SQL stuff that fuels more Oracle database installations, the SES 10g, or the Google Search Appliance? My sources indicate that Oracle sells more Google Search Appliances than SES 10g. Why? Well, it works and has a nifty API that allows Oracle consultants to hook the GSA into other enterprise systems. Forrester says Oracle is a search vendor, which is accurate. Forrester and Mr. Brodkin don’t mention the importance of the GSA in Oracle’s information access efforts.
Then there is Google or the GOOG. Google rates inclusion in the list of search leaders. The surprise is that Google is THE leader in enterprise search. The company doesn’t provide much information, but based on my research, Google has more than 11,000 Google Search Appliance licensees and more coming every day. When you add up the revenue from various enterprise activities, Google is not generating the paltry $188 million reported in its FY2007 financials. Nope. The GOOG is in the $400 million range. If my data are correct, Google, not Autonomy, is number one in gross revenue related to search.
What’s this all mean?
Let me boil out the waste products for you:
- Enterprise search is a non-starter in organizations. People don’t like the “search” experience, so the market is shifting. The change is coming quickly, and the established vendors are trying to reposition themselves by adding social search, business analytics, and discovery functions. The problem is that other companies are moving more quickly and delivering these much needed options quicker.
- There are some very significant vendors in the information access market, and these must be included on any procurement team’s “look at” list; specifically, Exalead (Paris) and Isys Search Software (Sydney and Denver). Both companies serve slightly different sectors of the information access market, but omitting them underscores a lack of knowledge of what’s hot and what’s not.
- Specialist vendors are having a significant impact in niche markets, and these vendors could make leaps into other segments as well. Examples that come to my mind are Attensity and Clearwell Systems.
- New players are poised to disrupt existing information access markets. Examples range from Silobreaker (Stockholm) to companies such as Attivio and Connotate. In fact, there is an ecosystem of new and interesting approaches that have search and retrieval functions but are definitely distancing themselves from the train wreck that is “enterprise search”.
I urge you to read the Forrester report. Just be sure of your facts before you base your decision on a single firm’s analysis. There is a reason that a pecking order in consulting exists. At the top are Booz, Allen & Hamilton, Boston Consulting Group, Bain, and McKinsey. Then there is a vast middle tier. Below the middle tier are firms that offers boutique services. Instead of accepting a firm’s view of the “top” or the “best”, make sure the advice you take comes from a firm that has a blue-chip recommendation.
The growing dissatisfaction with enterprise search can come back and bite hard.
Stephen Arnold, July 3, 2008
Searchenstein: Pensée d’escalier
May 1, 2008
At the Boston Search Engine Meeting, I spoke with a certified search wizard-ette. As you know, my legal eagle discourages me from proper noun extraction in my Web log essay. This means I can’t name the person, nor can I provide you with the name of her employer. You will have to conjure a face less wizard-ette from your imagination. But she’s real, very real.
Set up: the wizard-ette wanted to ask me about Lucene as an enterprise search system. But that was a nerd gambit. The real question was, “Will I be able to graft an add on to perform semantic processing or text mining system on top of Lucene and make the hybrid work?”
The answer is, “Yes but”. Most search and content processing systems are monsters. Some are tame; others are fierce. Only a handful of enterprise search systems have been engineered to be homogeneous.
I knew this wizard-ette wasn’t enthralled with a “yes but”. She wanted a definitive, simple answer. I stumbled and fumbled. Off she drifted. This short essay, then, contains my belated pensée d’escalier.
What Is a Searchenstein?
A searchenstein is a content processing or information access system that contains a great many separate pieces. These different systems, functions, and sub systems are held together with scripts; that is, digital glue or what the code jockeys call middleware. The word middleware sounds more patrician than scripts. (In my experience, a big part of the search and retrieval business reduces to word smithing.)
Searchenstein is a search and content processing system cobbled together from different parts. There are several degrees of searchensteinism. There’s a core system built to a strict engineering plan and then swaddled in bastard code. Instead of working to the original engineering plan, the MBAs running the company take the easier, cheaper, and faster path. Systems from the Big Three of enterprise search are made up of different parts, often from sources that have little knowledge or interest in the system onto which the extras will be bolted. Other vendors have an engineering plan, and the third-party components are more tastefully integrated. This is the difference between a car customization by a cash-strapped teen and the work of Los Angeles after market specialists who build specialized automobiles for the super rich.
This illustration shows the body parts of a searchenstein. In this type of system, it’s easy to get lost in the finger pointing when a problem occurs. Not only are the dependencies tough to figure out, it’s almost impossible to get one’s hand on the single throat to choke.
Another variant is to use many different components from the moment the company gets in the search and content processing business. The complexities of the system are carefully hidden, often in a “black box” or beneath a zippy interface. You can’t fiddle with the innards of the “black box.” The reason, according to the vendor, may be to protect intellectual property. Another reason is that the “black box” is easily destabilized by tinkering.
Traditional Publishers: Patricians under Siege
April 19, 2008
This is an abbreviated version of Stephen Arnold’s key note at the Buying and Selling eContent Conference on April 15, 2008. A full text of the remarks is here.
Roman generals like Caesar relied on towers spaced about 3000 feet apart. Torch signals allowed messages to be passed. Routine communications used a Roman version of the “pony express”, based on innovations in Persia centuries before Rome took to the battlefield.
Today, you rely on email and your mobile phones. Those in the teens and tweens Twitter and use “instant” social messaging systems like those in Facebook and Google Mail. Try to Imagine how difficult it would be for Caesar to understand the technology behind Twitter. but how many of you think Caesar would have hit upon a tactical use of this “faster that flares” technology?
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